Canadian oil going to Asia, no matter what: Harper

Prime Minister Stephen Harper speaks during a conversation with former U.S. Representative Jane Harman (D-CA) in an event for the Woodrow Wilson Center in Washington, April 2, 2012. (REUTERS/Jonathan Ernst)

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Bryn Weese, Senior Washington Correspondent

Apr 2, 2012

, Last Updated: 8:33 PM ET

WASHINGTON, D.C. -- Even if President Barack Obama approved the controversial Keystone XL pipeline tomorrow, at least some Canadian oil would still flow to Asia, according to Prime Minister Stephen Harper.

In a public one-on-one interview here with Jane Harman, head of the Wilson Centre think-tank, Harper said Obama's rejection of the controversial pipeline -- even temporarily -- stressed Canada's need to find other buyers for oilsands crude.

And that wouldn't change even if the president's mind did.

"Look, the very fact that a 'no' could even be said underscores to our country that we must diversify our energy export markets," Harper told Harman in front of a live audience of businesspeople, scholars, diplomats, and journalists.

"We cannot be, as a country, in a situation where our one and, in many cases, only energy partner could say no to our energy products. We just cannot be in that position."

His wide-ranging question-and-answer at the influential non-partisan think-tank -- which also touched on border security, trade, the Arctic and Syria among other topics -- followed a meeting with Obama and Mexican President Felipe Calderon at the White House for the sixth North American Leaders' Summit.

Harper also told Harman that Canada has been selling its oil to the United States at a discounted price.

So not only will America be able to buy less Canadian oil even if Keystone is eventually approved, the U.S. will also have to pay more for it because the market for oilsands crude will be more competitive.

"We have taken a significant price hit by virtue of the fact that we are a captive supplier and that just does not make sense in terms of the broader interests of the Canadian economy," Harper said. "We're still going to be a major supplier of the United States. It will be a long time, if ever, before the United States isn't our number one export market, but for us the United States cannot be our only export market.

"That is not in our interest, either commercially or in terms of pricing."

Earlier this year, Obama rejected TransCanada's bid to build the $7 billion pipeline that would carry crude from Alberta to refineries in the Gulf of Mexico.

Obama blamed Republicans in Congress for imposing an arbitrary timeline on him to decide on the project, which he said did not allow enough time for sufficient reviews even though Keystone had been under review for three years already.

Supporters of the project, which include big labour unions and the business community, estimate construction jobs alone to build the pipeline would be in the thousands at a time when the U.S. economy is struggling to recover from the recession.

Polls show some 60% of Americans also support building the pipeline.

But opponents argue developing Canada's oilsands cause high greenhouse gas emissions and worry the pipeline could leak in sensitive environmental areas along the route.

Last month, Obama tried to take credit for expediting the southern leg of the pipeline from Oklahoma to Texas that is going ahead, but the White House has no jurisdiction over the pipeline except where it crosses an international border.